Tether’s gold purchases could support prices for years - Jefferies

Kitco ^ | 25 Nov 25 | Neil's Christiensen

[delta7]

Kitco News) - Central bank gold purchases and investment demand have been two key factors driving gold prices to record highs this year, but one investment firm is looking at another segment of the gold market that is starting to attract significant attention.

For years, many analysts have expected tokenized gold to be the next evolution in the precious metals space, and it appears its time has come, as Tether Limited, the leader in cryptocurrency stablecoins, has become a major player in the sector.

Fahad Tariq and Andrew Moss, equity analysts at Jefferies, recently published a report on Tether’s growing influence in the gold market and the transformative impact this demand could have on gold and the mining industry.

“We believe Tether could remain a significant buyer of gold, supporting gold prices going forward,” the analysts said.

Highlighting Tether’s growing interest in the precious metals space, the analysts noted that representatives of the stablecoin issuer attended this year’s Mining Forum Americas Conference in Denver, Colorado.

“Investors shared with us that Tether intended to buy ~100t of physical gold in 2025, in addition to investing across gold royalty/streaming companies and the gold supply chain,” the analysts said.

While the cryptocurrency company has been buying gold to back its gold token, Tether Gold (XAU₮), Jefferies said the company’s demand goes much deeper than a single investment product. Citing company records, Jefferies noted that as of the third quarter, Tether holds about 116 tonnes of gold valued at $14 billion, of which only 12 tonnes back XAU₮ tokens.

Gold currently represents 7% of the holdings that back Tether’s stablecoin, USD₮.

“This means Tether is the largest holder of gold outside central banks, and its holdings are roughly equal to smaller central banks such as Korea, Hungary, and Greece,” the analysts said.

Tariq and Moss also said the published reserves represent only the minimum amount of gold the company holds, as it is unclear how much Tether maintains on its own balance sheet.

While the company’s gold reserves are impressive, Jefferies said it still has significant growth potential.

“Given's Tether's profitability (~$15B estimated for 2025), potential supply growth of USDT and XAUt, and management's positive comments about gold ("natural Bitcoin"), we believe Tether could remain a significant buyer of gold, supporting gold prices going forward,” the analysts said. “If Tether deployed 50% of annual profits into gold, it could theoretically purchase ~15t per quarter, or ~58t annually at spot gold. This is simply an estimate to provide an idea of the incremental demand that didn't exist previously. Also, if USDT continues to grow, the interest income and capital available to deploy into gold will grow as well. In other words, our estimate could prove conservative.”

In addition to buying gold, Jefferies noted that the company has also invested about $300 million in several precious metals streaming companies. Tether owns stakes in Elemental Altus Royalties, Gold Royalty Corp, Metalla Royalty & Streaming, and Versamet Royalties.

Some analysts note that digital gold could potentially revolutionize the precious metals market, as investors are able to buy fractionalized amounts of physical gold.

“In contrast to the drawbacks of ETFs, futures and physical gold, tokenized physical gold provides direct gold exposure, 24/7 real-time settlement, no management fees and no storage or insurance costs,” Jefferies said. “Low minimum investments increases accessibility and fractionalization enables the transfer of physical gold ownership and value that was not previously possible. Tokenizing gold may increase liquidity and the ability to rebalance portfolios quickly and efficiently.”

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TOPICS:
KEYWORDS: gold; russiasellinggold

[delta7]

Very interesting, electronic money turning to Gold for security. No surprise, man's " money" has done this for centuries.

Nothing new under the Sun.

[Vermont Lt]

Not really a fan of tether. Their bookkeeping early on was spotty at best. Maybe they’ve gotten their act together since then.

But a fully audited and secured gold digital currency would be interesting. But, I have always felt if it wasn’t in your hands, it really wasn’t yours.

[Red Badger]

So the fake money folks are using gold...

Tells you much, it does............

[Red Badger]

[misanthrope]

Glint is an interesting product. Worth looking in to.

[janetjanet998]

Tether is quietly becoming a global powerhouse and is diversifying

Taking their profits and investing in over a 100 small emerging companies

Paolo Ardoino 🤖

@paoloardoino

Today Tether publishes (a portion) of its investment/venture portfolio.
Overall Tether group invested in more than 120+ companies and this number is expected to grow significantly in the next months and years.

https://tether.io/ventures/

* these investments have been made with Tether’s own profits (13.7B in 2024), outside of USDt (and other stables) reserves and are part of Tether Investments arm

[misanthrope]

I appreciate your posting the G&S articles to FR. You round up some good and informative stuff.

Ignore that butt hole that stalks you.

IBTG

[janetjanet998]

Not exactly

Tether’s US Treasury holdings have soared to $135 billion, propelling the stablecoin leader past South Korea to become the 17th largest holder of American debt globally

[gleeaikin]

Too bad Russia has had to unload so much of its gold reserves to be able to keep killing its own people and Ukrainians.

Tells you much, it does!

[Vermont Lt]

If Russia invested in themselves rather than trying to steal every nickel they see…they could be digging up more gold in a year than most countries have in their reserves.

It is a shame that country cannot get their collective act together.

[delta7]

I appreciate your posting the G&S articles to FR. You round up some good and informative stuff.

Ignore that butt hole that stalks you.

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I do. Disgruntled, bitter, with an axe to grind. Reading Socrates forecasts and separating out it’s “distractions”, it was right on in predicting the generational PM Bull market that began in 2023.

Everything is a cycle, from birth to death, and everything in between. One must “ learn” to identify cycles (Prosper).

[dennisw]

So something that exists in thin air will be gold backed. For proof I want to see their gold bars every month. Put a live cam in the vault.

The high probability is that you cannot see their gold bars, they are mingled with other owners gold bars. The usual practice. The NY Fed reserve has a huge subterranean gold vault. That was in Bruce Willis heist movie/ Whatever gold bars that France, Denmark, whatever have stored there are in is its own separate cage. Gold bars are segregated by country. If UK pays Saudi Arabia 15 gold bars for oil. The bars are removed from the UK cage and put in Saudi Arabia’s cage.
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_Examples of Nations & Institutions Holding Gold There

Here are some known holders — keep in mind that exact holdings often are not publicly updated or fully disclosed.

Holder (Central Bank / Institution) Approximate or Known Details of Gold Stored in NY Fed Vault
Deutsche Bundesbank (Germany) Roughly ~1,200 metric tons — about one-third of Germany’s total gold reserves — are maintained at the New York Fed.
CMI Gold & Silver |
+2
Nasdaq
+2

Banca d’Italia (Italy) Over 1,000 metric tons of Italy’s gold reserves are stored in New York.
BullionStar New Zealand
+2
BullionStar Singapore
+2

De Nederlandsche Bank (Netherlands) The Dutch central bank still retains some of its gold at the New York Fed — though it repatriated part of its holdings (in 2014).
BullionStar New Zealand
+1

Miscellaneous European central banks (e.g. from Finland, Sweden) Smaller holdings: e.g. some sources reference the central bank of Finland and the central bank of Sweden maintaining modest reserves at New York.
BullionStar New Zealand
+1

International Monetary Fund (IMF) / other international institutions The IMF — or institutions affiliated globally — is believed to be among the largest non-sovereign holders stored at NY Fed, possibly with holdings in the multi-thousand-tonne range.
BullionStar Singapore
+1

[delta7]

You are funny, Russia is a major Gold miner. Since senile Joe’s war, Gold has more than doubled......and so has Vlad’s pocketbook.....nothing wrong with taking some “ profits”....billions $$$. The increase in the Gold price has given a windfall of profits that exceed the billions the West stole from Russia.

Russia is the wealthiest nation, number 1, with over $$$ 75 trillion in natural resources. They have a long, long ways to go before they “ run out”, and with a debt to GDP of 18 percent, isn’t going bankrupt soon ( like the EU- over 120 percent).

[gleeaikin]

Too bad Russia has had to unload so much of its gold reserves to be able to keep killing its own people and Ukrainians.

Tells you much, it does!